need2know: Shares poised to open down

Local stocks are set to open lower after concerns about a Portuguese bank hammered shares in Europe and weighed on Wall Street.

What you need2know:

• SPI futures down 16 points to 5404

• AUD at 93.90 US cents

• On Wall St, S&P 500 -0.04%, Dow -0.4%, Nasdaq -0.5%

• In Europe, Euro Stoxx 50 -1.6%, FTSE -0.7%, CAC -1.3%, DAX -1.5%

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• Spot gold up $US7.79 to $US1335.62 an ounce

• Brent oil up 36 US cents to $US108.64 per barrel

• Iron ore up slightly at $US96.90 per tonne

What's on today

Australia: ABS May housing finance;

German: consumer price index report.

Stocks to watch

Glencore has made an informal approach to graphite and vanadium junior Syrah Resources that could value the company at as much as $2 billion.

Investors and planespotters alike are keenly awaiting news from Qantas Airways as the national carrier gets closer to announcing major changes from its long running strategic review.

Hartleys has maintained West Australian gold miner Northern Star Resources as a "buy" with a price target of $1.61, as recent mine purchases performed better than expected.

Currencies

The yen hit a five-month high against the euro and an almost two-month high against the US dollar after concerns about Portugal's largest listed bank and weak Italian economic data hit European shares.

The moves also came after data showed the steepest drop in Italian industrial output in almost two years.The dollar gained 0.33 per cent against the euro to $US1.3601. The greenback also rose 0.16 per cent against a broad basket of currencies to 80.023, according to the dollar index .

Investors also continued to digest the minutes of the US Federal Reserve's June meeting, which were released on Wednesday and showed a still-dovish central bank. The Fed didn't offer any new signals that it is closer to raising interest rates.

Commodities

Nickel prices slid as inventories rose, giving investors a reminder of an overhang of material despite an Indonesian export ban. Benchmark three month nickel on the LME shed 1.4 per cent to close at $US19,250 a tonne.

Oil prices rose, ending their longest losing streak in years as traders bet a weeks-long decline had run too far. European Brent crude rebounded slightly after eight days of losses, the longest slide since 2010, and US crude recovered from a nine-day losing streak, matching a slide in late 2009. Some traders who shorted the market earlier bought back contracts to secure their profits, dealers said.

United States

US stocks fell on Thursday as concerns about the financial health of Portugal's top listed bank gave investors a reason to cash in recent gains.

"In a world of global news, you can always find something that is not doing well, whether it is political events in Iraq or banking in Portugal," said Rick Meckler, president of investment firm LibertyView Capital Management in Jersey City, New Jersey. "The real test will be the earnings and that will either give confidence to people to come back in or make them realise the prices they have been paying are just too high."

Microsoft chief Satya Nadella deferred any comment on widely expected job cuts at the software company on Thursday, after circulating a memo to employees promising to "flatten the organisation and develop leaner business processes".

Europe

Investors across Europe trimmed their exposure to banks on Thursday in response to growing concerns about the health of Portugal's biggest listed lender, with a leading pan-European share index slipping to a two-month low.

Shares and bonds of Espirito Santo Financial Group, the chief shareholder in Banco Espirito Santo, were suspended over "material difficulties" at its parent firm ESI. Trading in Banco Espirito Santo was also later halted after a 19 per cent drop, making investors nervous across Europe.

"The risk of contagion is clearly visible in the markets today as the market fears that there is more to come," said Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets in Brussels, referring to the problems at ESI. "I would treat it as an isolated case at the moment, but I would not be a buyer today and tomorrow as I think this can be a story for a while."

What happened yesterday

Australian shares broke a three-day losing streak to move higher as investors shrugged off news that unemployment had hit a 10-year high and some worse-than-forecast Chinese trade data.

The benchmark S&P/ASX 200 Index and the broader All Ordinaries Index each added 0.2 per cent, on Thursday to 5464.4 points and 5454.3 points respectively.